What is the Bangladesh standard on Audit(BSA-300) ? Describes in details

corporate practice bd

Export bill discounting, also known as export bill financing, is a common practice in international trade where a seller (exporter) receives funds in advance from a bank by discounting the export documents, usually a bill of exchange or invoice. The bank provides the funds to the exporter before the buyer (importer) makes the payment. The accounting treatment for export bill discounting involves several steps:

1. Recording the Initial Transaction:

   • When the exporter discounts the export bill with the bank, the bank advances a certain amount to the exporter.
   • Debit: Bank Account (to record the funds received)
   • Credit: Export Bill Discounting Receivable (a liability account)

2. Accrual of Interest:

   • Interest may accrue on the amount advanced by the bank until the buyer makes the payment.
   • Debit: Interest Expense (increases with the accrual of interest)
   • Credit: Interest Payable (a liability account)

3. Recording the Payment from Buyer:

   • When the buyer makes the payment on the due date, the exporter receives the payment.
   • Debit: Export Bill Discounting Receivable (to reduce the liability)
   • Credit: Bank Account (to record the payment received from the buyer)

4. Settlement of Interest:

   • When the buyer's payment is received, the exporter settles any accrued interest with the bank.
   • Debit: Interest Payable (to reduce the liability)
   • Credit: Bank Account (to settle the interest payment)

5. Recording Fees and Charges:

   • The bank may deduct fees and charges for prov

   Practical Example-01

   The ABC Company LTD, Produce & Yarn sales 15,000 Kg .Average Production capacity -18,000kg, Sales are occurred between In-house & other party.

   After 120 days, final settlement the bill bank send realize voucher copy to the client of The ABC Company LTD,

   Currently, the ABC Company LTD, sales their in-house party XYZ LTD, 7cd (BCI) 5000kg@$2.00=$10,000 Exchange BDT @92.per Dollar, Amount of TK.9, 20,000,

   Finally bill of exchange are prepared, after Acceptance the bill, our commercial department already submit the bill to the Bank for 90% discounting.

    Bank after discounting the bill, already Acceptance copy & discounting voucher at dated 30.04.2023 & sent to the client Mail ID. Accounting department of The ABC Company LTD, Print the copy’s & also takes necessary following action.

    

   SL NO.	Particulars	Debit(TK)	Credit(Tk.)
   01	Bill discounting Journal 90% against bill value($10,000*90%*92) dt.30.04.2023
   	CD A/C no.57948	8,28,000
   	Bank charge(export)	600
   	SIBL-IBP-23/2553L,LC-120506070		8,28,600
   	(To record 90%  discounting the bill)
   02.	Bank deduct  Tk.300 against LC advising charge
   	Bank charge(Export)	300
   	CD A/C no.57948		300
   	(To record LC advising charge by bank)